STATE OF NEW YORK 


REPORT 

OF THE 

Commission to Investigate the 
Methods of Purchasing 
Materials, Supplies, Etc. 



TRANSMITTED TO THE LEGISLATURE FEBRUARY 4, 1918 


ALBANY 

J. B. LYON COMPANY, PRINTERS 
1918 






STATE OF NEW YORK 


REPORT 


'TUjult UoOk L 


Commission to Investigate the 
Methods of Purchasing 
Materials, Supplies, Etc. 


TRANSMITTED TO THE LEGISLATURE FEBRUARY 4, 1918 


ALBANY 

J. B. LYON COMPANY, PRINTERS 














J ) 
J ) J 




State of New York 


r* 


fO 


f- 


No. 16 


IN SENATE 

February 4, 1918 


Report of the Commission to Investigate the 
Methods of Purchasing Materials, Supplies, etc. 


State of New York — Comptroller’s Office 

Albany, January 31, 1918 

To the Legislature: 

Pursuant to chapter 142 of the Laws of 1917, the Commission 
to investigate the methods of purchasing materials and supplies 
thereunder, respectfully submits its report as required by section 5 
of said chapter. 

EUGENE M. TRAVIS, 

Comptroller, 
JAMES M. CARTER, 

Superintendent State Prisons, 
W. W. WOTHERSPOON, 
Superintendent Public Works, 
CHAS. W. PILGRIM, 

Chairman State Hospital Com¬ 
mission, 

F. R. UTTER, 

Fiscal Supervisor, 
JOHN H. FINLEY, 

Commissioner of Education, 
WM. A. ORR, 

Secretary of Trustees of Public 
Buildings. 











































































































































































; : ' ■ ' . ‘ ' ' 










REPORT 


A preliminary meeting of the Commission was held May 
1917, at which resolutions were adopted that each State depart¬ 
ment be requested to present its present form of practice and pro¬ 
cedure in the making of purchases. 

At a following meeting held June 3d, the representatives of the 
various departments presented their reports, which were filed with 
the Comptroller. Committees were created to work out details and 
suggest plans of procedure for the study of all existing methods 
of purchasing in the State. The members of one of these com¬ 
mittees familiarized themselves with the present purchasing meth¬ 
ods, the laws upon the subject, and investigated the centralized 
purchasing systems of the Federal government at Washington, of 
the city of New York and of other State governments. Sub¬ 
committees were delegated to examine the laws and practices 
relating to the present purchasing system of the state hospitals, 
charitable institutions, prisons and trustees of public buildings 
and to study and examine the forms of contracts now^ used and 
specifications and standard tests of supplies. Another committee 
was delegated to study the methods now prevailing in making of 
purchases for the various State departments, boapds'lind commis¬ 
sions, which included also examination of numerous reports and 
vouchers on file in the Comptroller’s office with the assistance of 
clerks of this department assigned for the purpose. 

Of the systems and data examined, the Commission reports as 
its opinion that the system now in use by the Federal government 
in the city of Washington, with the necessary modifications, is the 
best one upon which to found an act for creating a centralized 
purchasing system for this State. It is confidently believed that 
such a system will raise the standards of quality of supplies, elim¬ 
inate many grades and varieties, extend the field and increase the 
number of bids for furnishing supplies; eliminate much duplica¬ 
tion of labor in the preparation of schedules and contracts: secure 


6 


[Senate 


better and more favorable deliveries and generally result in con¬ 
siderable saving of cost. One of the immediate and most beneficial 
results would be the consolidation of the purchasing agencies of 
all the State departments, boards and commissions with the present 
more or less centralized purchasing agencies of the various groups 
of the State institutions, such as the hospitals, charities and 
prisons. 

It i& not believed that it will be wise to attempt such consolida¬ 
tion immediately but to enact a law which would enable such 
consolidation, say on July 1, 1919. This would afford time for 
the Commission to continue its research and for a satisfactory 
organization. During such time another session of the Legislature 
would he held at which the law could be amended if it should he 
found desirable to do so. 

The Commission is fully convinced of the advantages arid 
practicability of a centralized purchasing system and has in prep¬ 
aration a bill for its creation which it expects to submit to the 
Legislature for its consideration not later than March 1, 19IS. 

The plan which will be recommended by the Commission will 
not contemplate the erection of a new department, the creation of 
any. new salaried positions, nor any radical disturbance of existing 
purchasing agencies. Its object will be the consolidation of such 
agencies in order to gain the benefits of their experience and activi¬ 
ties in a more concentrated or collective form by combining pur¬ 
chases where this can be done to advantage. 

Some extracts of various systems and data examined are 
appended to this report. 


No. 16] 


APPENDIX 

The Federal System at Washington 

By section 4 of the act of June 17, 1910 (36 Stat. 531) it was 
provided: 

“ That hereafter all supplies of fuel, ice, stationery and other 
miscellaneous supplies for the Executive Departments and other 
Government Establishments at Washington, when the public 
exigencies do not require the immediate delivery of the article, 
shall be advertised and contracted for by the Secretary of the 
Treasury, instead of by the several departments and establish¬ 
ments . . .” 

“ There shall be a General Supply committee in lieu of the 
board . . . composed of officers, one from each department, desig¬ 
nated by the head thereof, the duties of which committee shall be 
to make, under the direction of the said Secretary an annual 
schedule of required, miscellaneous supplies, to standardize such 
supplies, eliminating all unnecessary grades and varieties . . .” 

In pursuance of this section, the General Supply Committee 
prescribed suitable regulations and prepared the “ General Sched¬ 
ule of Supplies ” in bound form, comprising nearly twenty thou¬ 
sand different items. 

It is stated as not being the intention of the Secretary of the 
Treasury in including in the schedule and in contracting for 
articles used in scientific, laboratory or research work, to inhibit 
the purchase of articles of a different grade or manufacture when 
the articles included are not suitable for the required purpose. 

Experience of tiie City of New York 

The “Mayor’s Central Purchasing Committee,” organized 
November, 1914, inaugurated a new consolidated contract pro¬ 
cedure for the city and has already consolidated practically all the 
contract purchasing of the twenty-eight departments and offices 
under the direct supervision of the mayor. 

Among the advantages said to be derived by the city from 
co-operative purchasing are: The cost of supplies has: been 


8 


[Senate 


decreased; competition has been widened by the addition of many 
new bidders and the use of a consolidated mailing list; additional 
standards have been established for supplies . . . thereby reducing 
the cost of beef, mutton, ham, coffee, etc., and removing the uncer¬ 
tainty of the meaning of proposals; marked reduction in the cost 
of labor of preparing proposals and contracts; the committee has 
functioned as a bureau of information and complaints; the estab¬ 
lishment of a central sample room; the reduction of work of other 
central agencies of the city government. 

Numerous concrete instances are given of saving in cost, increase 
in number of bids, etc., on a basis of parallel conditions in the 
years of 1914 and 1915 prior to the general demoralization of 
prices and delivery factors following involution of the country in 
the present world’s war. 

In the table of comparative prices of 1914 with 1915 a few 
conspicuous items are selected: Nut anthracite coal, $6,571- 
$6,544; bituminous coal (run of mine), $3.536-$3.136; canned 
tomatoes, $2.68-$2.12; gasoline, $0.1419-$0.0995; hams, smoked, 
$0.1617—$0.1484; milk, $0.05829-$0.05315; rice, $0.0524- 
$0.0493; rubber coats, $2.507-$1.90; the prices being for stand¬ 
ard units of the commodities. 

There is of course some advantage in New York city on account 
of concentration of delivery and terminal facilities for shipment 
and distribution which would not obtain in the wider range of 
the entire State. 


The State of California 

The State of California enacted in 1915 a very broad bill 
creating a State purchasing department. This bill created the 
office of State purchasing agent who is made the purchasing agent 
of and for each and every State department, commission, board, 
institution or official. After a few months of study of methods 
and forms, necessary for the operation of the department, it took 
over the purchasing for the State offices and commissions, sixty- 
five departments in all. The department has been organized into 
seven divisions according to commodities with expert chiefs in 
charge of the various divisions. Supplies have been largely stand¬ 
ardized on which collective bids are invited. Purchases are classed 


No. 16] 


9 


under two general heads, viz.: non-contract and contract. While 
the department was inaugurated under the adverse and trying 
trade conditions of greatly disturbed and uncertain markets, the 
report shows great savings in certain lines of supplies purchased. 
While the principle and practice of this system appears to he 
sound and economical, it is not believed that so revolutionary a 
method should be recommended for the State of New York at the 
present time on account of the greater volume, wider diversity of 
supplies required and larger number of departments and institu¬ 
tions to be served. 

The City of Birmingham (England) 

For the city of Birmingham, a “ General Purposes Committee ” 
Avas created which presented their report to the council at the 
meeting held July 3, 1917. The report of the committee states 
that as a preliminary to their investigations, they obtained from 
the various departments particulars of their purchases of stores, 
Avith prices, and as to the manner in which these stores were 
received and distributed. “ They also received valuable informa¬ 
tion and assistance from the Chief Officer of stores of the London 
County Council.” A table is given of some stores in regular use 
by several committees with prices prevailing immediately prior 
to the outbreak of the war. Comparison of prices paid by the 
city of Birmingham for several classes of these supplies with the 
London County Council's prices show considerably in favor of the 
latter. 

“ The Corporation have in four instances already demonstrated 
the success of concentrated buying in the purchase of petrol . . . 
coal . . . fodder . . . and stationery.” “ The two principles to be 
immediately considered are: (1) as to whether a central stores 
should be established . . . and (2) the establishment of a system 
of buying articles common to more than one committee under the 
direction of a special subcommittee or committee, assisted by the 
existing departmental buyers. . . .” 
























, 















; 





















































: 


















: 











: • ; 






! 






• • ... 






. !.. 


. . 















.... 


! ' 














































• • 1 






I . 












* 


\ < ' . ’ 




































































































. 














































. 







































































' 









. 


































